US stocks closed slightly lower on Friday, retreating from the previous session's record highs on a drop in financial shares, but major indexes had the biggest weekly gains since the first week of the year.
The Dow Jones Industrial Average was down just 0.08 points at 14,865.06. The Standard & Poor's 500 Index was down 4.51 points, or 0.3 per cent, at 1,588.86. The Nasdaq Composite Index was down 5.21 points, or 0.2 per cent, at 3,294.95.
Shares pared losses in the final hour of trading, with the Dow helped by a rally in Home Depot. For the week, the S&P 500 rose 2.3 per cent while the Nasdaq rose 2.8 per cent. It was the best weekly gain for both since the first week of the year. The Dow rose 2.1 per cent.
Financial stocks were pressured on Friday by a pair of disappointing bank results and a delay in closing a large bank deal.
Weak retail sales and consumer sentiment data, suggesting the economy lost momenturm, also weighed on stocks.
The string of discouraging data indicates that equities could be vulnerable to a pullback, especially following a rally that has taken the S&P 500 up 11.4 per cent so far this year. Telecom and healthcare, two defensive groups, were among the few S&P sectors in positive territory.
"We're due for choppiness, given the run we've had, especially since the strong data we've seen recently looks increasingly misleading," said Hank Herrmann, chief executive of Waddell & Reed Financial.
"We're moving at a slower pace, and those who got overly excited about GDP growth are probably pulling in their horns a bit."
On Thursday, the Dow and the S&P 500 closed at all-time highs.
Both JPMorgan Chase & Co and Wells Fargo & Co were lower after reporting results, with JPMorgan hit by a decline in revenue and Wells Fargo by a reduction in home loans. Shares of Wells dropped 0.8 per cent to $US37.21 while JPMorgan, a Dow component, was off 0.6 per cent at $US49.01.
"The numbers weren't terrible, but also not terribly inspiring," said Herrmann. "I wanted to see more credit growth as confirmation that the economy is doing better and that didn't show up."
Earnings for S&P 500 companies are expected to grow at a modest 1.2 per cent in the first quarter, down from a January forecast of more than 4 per cent, according to Thomson Reuters data. With only 6 per cent of the S&P having reported thus far, 62 per cent of companies have beaten expectations.
The S&P financial sector lost 0.4 per cent and was hurt by a delay in the closing of M&T Bank Corp's acquisition of Hudson City Bancorp.
M&T shed 4.5 per cent to $US100.24 while Hudson slumped 5.5 per cent to $US8.29 as one of the S&P's biggest percentage decliners.
Losses were offset in the Dow by Home Depot, which jumped 2.4 per cent to $US73.62 after Jefferies & Co upgraded the stock on expectations of strong first-quarter same-store sales.
Data showed retail sales fell 0.4 per cent in March, while February's strong gain was revised down slightly. Consumer spending plays a key role in the US economy, accounting for two-thirds of activity.
Another report showed consumer sentiment fell to a nine-month low in early April amid gloom about the long-term health prospects for the US economy.
Investors have been rattled by indications economic growth could be softening, particularly after last week's disappointing jobs number, though that has not derailed the market rally so far.
The advance in equities in recent months was partly buoyed by the Federal Reserve's economic stimulus efforts, and analysts are viewing the first-quarter earnings season as a test for whether those gains are justified by corporate performance.
Material and energy stocks also fell alongside a drop in oil and precious metal prices. Oil prices sank 2.8 per cent to an eight-month low while gold hit its lowest since July 2011. Prices were hit by concerns over the global economic outlook and the impact it could have on demand.
Newmont Mining fell 5.9 per cent to $US36.37 while Newfield Exploration was down 4.1 per cent to $US21.70. The SPDR Gold Shares ETF fell 4.7 per cent to $US143.95 and hit its lowest close since May 2011. Friday marked the worst day for the gold ETF since February 2012.
About 58 per cent of companies traded on the New York Stock Exchange closed lower while 57 per cent of Nasdaq-listed shares closed in negative territory.
Volume was light, with about 5.94 billion shares changing hands on the New York Stock Exchange, the Nasdaq and NYSE MKT, below the daily average so far this year of about 6.36 billion shares.